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I remember in 3rd grade collecting insects for school. I loaded on all the different things I could find on the farm and had the largest collection to turn in. I lost a couple of points for style (Styrofoam board and handwritten names) over the banker’s kid who had a polished and stained wood slab with wood burned names for the minimum number of insects. I clearly remember the large monarch butterfly on her display. That activity, at least as to monarchs may not only not be a recommended science class project but also potentially violate federal law.

The monarch’s status as protected will be determined by 15 December 2020. The work to make it a protected species has worked through court cases, petitions and federal review. Here is a look at some of the things that might happen more than a feel-good moment if the monarch butterfly receives different designations. The options are endangered, threatened, or non-listing.

“Endangered” Listing

An endangered listing is the strongest protection Endangered species become eligible for designated critical habitat, and federal agencies must ensure that their actions will not put the species in jeopardy of becoming extinct. This is the highest level of protection available. Protections include outlawing take, import and export of the species, possession, and sale. “Take” includes “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect or attempt to engage in any such conduct. “harm” is “significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering.”  That means milkweed, the only source of food and its host plant would also get protection. It is possible that any agricultural activity which would cause “take” of the monarch would be a violation its protected status. That includes spraying the milkweed in the ditch.

Endangered species are eligible for critical habitat designation where they live under two ideas. Where they were at the time of the listing and where they might go to keep living. Pretty broad. Remember, monarch is migratory traveling from Canada to Mexico. Nearly every state in the US is has potential monarch butterfly habitat.

Federal agencies must “fund, authorize, or carry out” activities that do not jeopardize the survival of any listed species or adversely modify any designated critical habitat. If an agency concludes that its proposed action “may affect” a listed species, it must consult with FWS to avoid jeopardy or adverse modification. The length of time necessary for the consultation process varies from project to project. It includes studies. That means Corps of Engineer projects consider the butterfly before making dams or draining waterways. That means USDA housing projects consider the butterfly before putting up a new multifamily housing unit. That means new chemicals getting listed for use in ag must consider the butterfly before federal approval is granted.

 “Threatened” Listing.

Threatened species need to have the feds “to provide for the conservation of such species.” It is not the same as endangered. The protections outlined for endangered will only be triggered if a separate rule for the butterfly is issued.

“No Listing”

NO listing does not mean no protection. Sometimes industry, in an attempt to avoid mandatory protections will enter into Candidate Conservation Agreement with Assurances (“CCAA”). The agreements required participants to engage in certain conservation efforts and skip others without the listing. These agreements are in effect in some cases for up to 25 years.

For Ag, a non-Listing will mean no big change in the immediate future. A non-decision doesn’t mean more court cases and reviews aren’t on the horizon, after all, lawyers are involved.

The assumption is that the COVID impact on farm real estate would be dramatic. However, between the delay in foreclosure actions by the courts, the stimulus money payments and the time of year it is interesting to see that while real estate auctions were down 36.5% compared to a year ago, the acres auctioned in that time period where only off by 1%. For those who are waiting to reap the harvest of cheap land prices, the sorrow may be their own and not of failed landowners.

Here are some interesting facts to consider about why farmland in Iowa remains largely unphased by the upheaval.

  1. 80% is estimated to have no debt. Taxes and insurance are pretty low on farm properties, making carrying it not as stressful as carrying a commercial building would be.
  2. Interest rates are historically low for those that do have to borrow. Banks continue to lend money to qualified borrowers even in stressful times, and land without debt helps qualify for sure.
  3. Land compared to the stock market is a comforting investment. You wake up with the same number of acres you went to bed with and the value doesn’t depend on who tweeted what about whom the night before.

By comparison in 2000-2002 when the tech industry screwed up the stock market (the Dot Com Crisis), the S&P 500 lost 44% and crop ground gained 18%. In 2007-2009, when the mortgage crisis was at its height, the S&P dropped 46% while crop ground gained 26%.

Every day, a new company goes public and offers a new stock investment opportunity. Every day, pave over productive farm ground and ask the remaining ground to do more with less. It is clear that land remains a solid investment.

CFAP program sign up is underway.  Sign up for the Coronavirus Food Assistance Program is open through August 28, 2020.    For producers who have suffered 5% or greater price decline. Relevant commodities in our area include barley, oats, soybeans, wheat, wool, cattle, hogs, sheep, Diary, Select vegetables and fruit.   Be patient with the folks at USDA, they are learning the program at the same time we are.

Navigable Waters Protection Rule” aka (New WOTUS) was articulated by the EPA and the Army Corps of Engineers and promptly challenged. Lawsuits have been filed by cattle trade association groups claiming the rule is too broad, and lawsuits have been filed by several states and environmental groups claiming the rule is too narrow. This isn’t the first change or challenge nor will it likely be the last. A collation of states are suing the EPA for not doing enough to protect the waters of the US. Other litigation over what is or isn’t include muddy up the court docket as well. The litigation flows slower than a creek in a July drought.

For an example, 2012, the US Supreme Court found that Idaho landowners could bring suit to challenge the EPA’s determination that their property was a “water of the United States” and a Section 404 permit was required under the Clean Water Act.  In April of this year, the EPA filed a motion to dismiss the case, which was opposed, and the appeals court agreed with the landowner. So back to court it goes. Some of these litigation events grow so long in the tooth that not only do they have birthdays, but they are in some cases eligible for driver’s permits.

 “Don’t Waste a Crisis — Your Patient’s or Your Own” M. F. Weiner   Medical Economics, 1976.

Okay, so some of you will say Churchill said and some will say Rahm Emanuel is the proper attribution, but this one I could find and cite. Regardless of who said it first, we are in a crisis so are we wasting it? Extra time to do books instead of running to a social obligation, time to contemplate operation changes, estate planning, or financial moves if available, and you have less competition for your most precious commodity, time. Acknowledged, other demands, such as extra supervisors in the form of newly stay at home spouses or the kids on extended, early summer break are present, but you owe yourself to carve out a small block of time to reinvest in your operation.

If you don’t think enemies of production ag are using this event to further their own agenda, you are wrong. While milk is being dumped, hogs and poultry are being euthanized rather than harvested and fat steers are held off the truck, anti ag is hard at their own goals.

The easy things, like lobbying against aid packages for production ag and pushing plant-based foods only is to be expected. After all those organizations have deep war chests (Funded in part, by purposely confusing the public between local pet shelters and their national lobbying arms). But also, they are pushing on fronts that are not as watched by the public. For example, Chicago recently banned horse carriages without much public notice or outcry as we all remain affixed on acute economic strain. Protests are arranged at the harvest facilities; they engage producers on social media and are working hard to get “gotcha” footage of farm operations to create out of context images to incite the public.

 These activities include trying to ban the use of animals on COVID related research, trying to plant the seed in op ed pieces that livestock and production ag is the root of the economic problems, and buying stock distressed companies in the fabric and food industry. PETA has purchased stock in Tyson, Sanderson Farms, Maple Leaf Foods, Oscar Meyer’s parent company Kraft Heinz, WH Group (owner of Smithfield) and Hormel Foods. Buying stock is a way to gain a foot hold on shareholders meetings and attempts to influence the board of directors and their polices.  A new animal impact fund, with the former head of Human Society of the United States involvement, features publicly traded companies that support the anti-animal production agendas. 

Sygneta claims are being paid.  The claims administrator mailed the first round of checks on April 7th

1) This is not the full payout. These checks are expected to be about 60-65% of the final payout. Funds have been set aside for pending claims appeals, attorney’s fees, and administration costs. Once all work is completed and all appeals final, the remaining funds in those accounts will be disbursed, pro-rata, to the clients. We have no idea what that amount will be.

2) Whether or not the operator planted Syngenta seed DOES impact the payout. Operators will receive significantly less than the neighbor if they checked “yes” in that box because those planted Syngenta seeds, will get less money. They signed a stewardship agreement that waived rights to recover.

3) The total paid out has NOTHING to do with which law firm you used. No law firm has access to the data. The court let the lawyers take it to trial and push the issue maximize the recovery and then removed the lawyers from the total paid out. That action is still under appeal but will not impact payment to the clients. Only the claims administrator and the Court are involved in the calculation of payouts.   Lawyers do not know the exact numbers used to calculate payments. Only the claims administration firm has access to final totals. There is no final per bushel pay-out amount until there are final checks. (We do know that they used a $0.12/bushel baseline for this check.) This is a preliminary estimate and is not a final number. It also does not mean anyone actually received 12 cents for any bushel of production. Each compensable year has a percentage recovery rate so it’s not a straight percentage of production. The maximum possible recovery under a 12 cent/bushel calculation is less than 4 cents/bushel since the maximum percentage annual basis is 33% for 2014.)  Attorneys have no way of keeping the claims administrator accountable and can only take them at their word. The attorneys don’t have access to the data.

4) Regardless of what happens with the appeals, clients will NOT be required to pay any of the money received to attorneys. Attorney’s fees are being handled by the court.   Clients will NOT under ANY circumstances, be required to compensate us from the money they just received. If you hear of any lawyer or firm requesting clients to compensate them directly, please let me know. That would be in direct violation of the court’s order.  The attorneys will not be receiving a contingency based fee. Instead, the court will determine what we get paid. As of now, approximately 30% of the original settlement is in a trust fund pending the outcome of the appeals. The attorneys will be paid from that fund, not the client fund.

5) If  an operator down the way, who farms less than you do, claims to have received more money than you, that operator is most likely either not letting truth get in the way of a good story or there is some distinction between your claims (ag, fed-on-farm, Syngenta seed)

6) However, the administrators have made mistakes and typos in the past. If you believe your numbers are wrong based on the claims of other farmers, and you can get a copy of the other party’s determination letter, the attorneys can review the numbers and attempt to determine why there is a discrepancy. The farm operator or the attorney can ask the administrators to confirm the number.

7) If an operator received a determination letter that stated they had “0” bushels compensable and ignored it because they didn’t think the suit would ever get any real money, they  will not get a check.

8) If the operator did not send in a signed W-9, or log-in to the portal and fill out the W-9 form, you will not get a check.

9) If you have not received a check yet, that does not mean you will not get one. If you received a determination letter with compensable production listed, you will receive a check. The claims administrator is printing checks in a rolling fashion. They will not reveal the basis for that or when to expect checks for certain categories of claimant.

10) If the operator did not submit the required claim notification paperwork within the oft-extended deadlines, they will not get a check. Ever. For those who quit responding to calls and letters or believed that they were signed up by virtue of being a farm operator without further action it is too late. 

Friday, December 04, 2020
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill Dillon focuses on family law, estate planning and IRS matters. Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill spent extensive time advocating for low income tax payers in front of the IRS and the State of Iowa Department of Revenue while at Drake.

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